Why do companies invest in Operational Risk Management (ORM)? At first glance, it might seem like a simple question with a simple answer: to assess the likelihood of operational incidents and potentially limit the damages or chances of such incidents happening.

However, the reasons are much more diverse, and go much more deeper, than just that. DuPont surveyed both small and large firms to determine the main reasons why companies and organizations invest in Operational Risk Management, and the five key drivers were:

1. Safety

As said previously, safety is evidently a main driver for investing in risk management. Making sure that all stakeholders remain safe while interacting with the organization is crucial to maintain activities running without issues.

2. Compliance

Compliance is another evident main factor: companies find it important to manage their organization in a way that is compliant with rules and regulations in the market. Not complying with such rules could hinder operational activities of the company, induce fines and damage the reputation of the organization.

3. Avoiding Shutdowns

Avoiding unplanned shutdowns was indicated as a very important driver for companies, which is understandable when one looks at the damage such shutdowns have. Unplanned shutdowns bring enormous unexpected costs, which can seriously harm a company’s profits as well as seriously hurt firm growth and expansion. With ORM, firms can have a contingency plan in place for such cases, reducing time, and money, spent on managing the meltdown.

4. Driving Improved Performance

Many firms looked at the long-term benefits of ORM and answered that driving performance was a key driver to invest in risk management. Not only does it allow companies to examine their operations and determine the risks, it also allows to determine where there is room for improvement, leading to improved performance in the long run. Risk and opportunity are very closely related.

5. Avoid reputation damage

Last, but not least, reputation was indicated as very important by the responding firms in their decision to invest in ORM. Especially with todays social media reputational damage can spread like wildfire and cause very serious damage. Communication plans and direct action plans are to be part of the standard controls of an organization small or large.


All organizations benefit from dedicated attention to risk management. It is important to understand that all these factors are linked and affect each other. As an example, an increase in safety and performance will most likely increase the reputation of a firm, while a safety incident or an operational shutdown will do the opposite. Also, improved performance can increase safety and decrease the chances of unplanned shutdowns. It is really crucial for companies to invest in Operational Risk Management, as it allows them to deeply understand the mechanisms behind their operations and open opportunities for modifications to not only improve safety and reduce risk, but also to increase long-term performance of the company. Read more information about RiskRhino’s risk management apps here.

About DuPont

DuPont is a science company dedicated to solving challenging global problems, while creating measurable and meaningful value for its customers, employees and shareholders. Our dynamic portfolio of products, materials and services meets the ever-changing market needs of diverse industries in more than 90 countries. We unite around a set of core values—safety and health, environmental stewardship, highest ethical behavior and respect for people—just as we have for two centuries. www.dupont.com